Professional Wrestlers – Independent Contractors?

By Michael Barton aka MonticelloCards

“Under federal law, a worker is either an employee or an independent contractor. The determination is measured by the degree of control the employer has over the independent contractor, versus the degree of independence the independent contractor has from the employer.”

Based on the above paragraph, one would instantly think, in regards to the wrestlers employed by both World Wrestling Entertainment and Total Nonstop Action currently, as well as any professional wrestler who has ever been forced to work for only one company, that they would have to be classified as employees of the company rather than as independent contractors. I would almost have to believe that, if 100 people who were involved in business and/or law yet uninformed about professional wrestling were surveyed, a large majority (if not a completely lopsided majority) would consider wrestlers employees. And, the more I delve into the legalities of independent contract work, the stronger I feel that wrestlers are being misguided and misused, as well as being improperly categorized in their job market, thus losing many important rights that they should be afforded.
This is a very dynamic and complicated project, which has taken me a great amount of time to put together. It is my hope, that with time and education, professional wrestlers finally get the rights afforded them, either as independent contractors or as employees, and the absolute power that appears to be currently held by the major promotions ceases to exist. Sadly, in the current landscape, the companies have the best of both worlds, in that they do not provide specific crucial items, such as health insurance, to their employees, while signing them to exclusive contracts that appear to clearly show an employer/employee relationship, and not a contractor/customer relationship.

“As an independent contractor, the hiring company is not your employer – they are your customer. Independent contractors have the right to decide when, where, and how a given project should be completed. If you are an independent contractor, the business hiring you is not entitled to direct your work. Generally speaking, your customer specifies the desired outcome of your work, and you have the freedom to determine how to achieve that outcome.”

Read that paragraph again, as slowly as you can without disrupting the flow of it. The main sentence that sticks out to me is in regards to a company not being entitled to direct your work. From an outsider looking in standpoint, as I have yet to find an actual WWE contract available for viewing, I would assume there has to be specific legal language within each contract the WWE legal department drafts in regards to direction, because this practice of considering the wrestlers as independent contractors would make me believe that the WWE is not allowed to tell someone what character they need to be, how that character reacts, and other pertinent details that should be the right of the wrestler, not the creative team. To go even further, the WWE should not even be allowed to dictate wins and losses because on the legal ramifications in determining an outcome. Yes, the outcomes still need to be pre-determined, but those decisions should be in their hands, not the hands of the companies they “don’t work for”, but instead, “provide services to”. I understand that would be an impossible task, as professional wrestling simply does not work having the boys book the show. So, considering that professional wrestling needs to have a “boss” who makes decisions about positioning and outcomes, there appears to be no legal way for the WWE to classify wrestlers as anything but employees.

“By doing this (classifying workers as independent contractors as opposed to employees), employers do not have to match welfare taxes, including Social Security, Medicare and Federal Unemployment Taxes, which are almost eight percent of an employees pay. Nor do they have to pay fringe benefits, ERISA, workers compensation, or withhold state and federal taxes. It also eliminates the need for ensuring minimum wage and overtime pay.”

Obviously, WWE is not the only company in the world who wants to save money, and by labelling your employees as contractors, you probably save millions of dollars a year, based on such things as tax rates. Sadly, such a high profile company, with such a negative medical history as WWE has, should be providing health benefits to its talent. Granted, they have stepped up in regards to providing substance abuse rehabilitation to anyone who has worked for the company, even for a day, on their dime. And, yes, unlike TNA, they do pay for surgeries for talent injured in the line of work. But these acts of kindness, due to the contractual structure in place, also allow WWE to take maximum deductions for said services as write offs. The “so called” good will is not something done for the right reasons. It is done to maximize profits, and to spin the company in a positive light to the public, something that they have done in earnest since the Benoit double murder suicide. They are most likely saving millions of dollars a year because of exemptions in paying the taxes of the majority of their payroll. The thing I really do not understand is how the IRS nor the US Department of Labor has not gone after them yet! With the economy in trouble, these divisions of the United States government have done little if anything at all to at least investigate these matters, something that, I hope, will change in the near future.

Here is a brief questionnaire from a legal website that deals with contract law.

Guidelines for Classification

To determine a worker’s status, answer this question: Is the person in business for himself or herself? Consider the following factors:

- The worker’s opportunity for profit or loss depending on his or her managerial skill.

- The degree of the worker’s right to control how work is performed.

- The worker’s investment in equipment or materials.

- The worker’s ability to hire helpers to perform a task.

- The level of special skills required to render the service.

- The degree of permanence of the working relationship.

- The extent to which service rendered is an integral part of the employer’s business.

On the other hand, independent contractors will:

- Have other customers (employers).

- Perform only high level, skilled tasks.

- Advertise their services

- Have an office outside the employer’s place of business.

By this point, I think it is readily apparent to even the most novice of laypeople that what the professional wrestling business, in this case WWE and TNA, are doing nothing more than what they always do – misleading the public, and in WWE’s case, misleading its investors as a publicly traded company. I sincerely hope that someone with the guts and courage to stand up reads this, because the sad reality is this: wrestling is going to need its own Curt Flood, the man who was responsible for challenging baseball’s practices and bringing free agency to the players, and in doing so, cost himself his career. Is there anyone with the courage out there to do just that? I, myself as nothing more than a fan, have forwarded this column to both people in the IRS as well as The Department of Labor, but have received no response as of yet. I will keep everyone informed as the journey progresses and if anything is actually done. It has to start somewhere, right?